London Stock Exchange Group (LSEG) today made its first investment in enterprise blockchain, leading a $20 million Series B in Nivaura, a London-based startup working to automate tokenized bond issuance on the Ethereum network.
The investment, which also includes a Spanish bank’s venture capital arm and two UK-based international law firms, as well as former executive at HSBC, marks the latest escalation in a race among traditional exchanges looking to capitalize on the technology that was once thought of as an existential threat.
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Earlier this month, the operator of the Swiss Stock Exchange, SIX Group, said it would launch its new blockchain-powered exchange, dubbed SIX Digital Exchange (SDX), in the second half of 2019. The new platform, which will initially run parallel to the existing SIX platforms, will use blockchain distributed ledger to bridge traditional finance and the technology of cryptocurrencies.
The investment also comes at a time when several crypto startups are cutting back on staff after cryptocurrency prices saw a catastrophic drop in 2018 and have stagnated so far this year.
As we reported earlier, crypto firms have turned to venture capitalists as the collapse in digital asset values over the past year has made new investments through ICOs, which were once plentiful, drying up for blockchain-related startups including the so-called crypto hedge funds.
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Nivaura enables owners of cryptocurrencies to borrow fiat funds via the issuance of crypto asset-backed bonds. The company says its product finds appeal with institutional players as it allows them to offer crypto-denominated debts for fixed durations and coupons.
The group of new investors, none of which directly competes with another, also could push Nivaura closer to realizing its goal of slashing “the time from issuance to market for financial instruments by up to 80 percent.”
Nivaura’s CEO Avtar Sehra further explained: “Nivaura’s platform streamlines and automates the entire end-to-end process of issuing financial instruments and their ongoing administration and lifecycle management. The technology has already been deployed across multiple asset classes including private placement vanilla bonds, more complex structured products and equity.”